The biggest office sale in Singapore so far this year has been struck, with Pacific Star Group selling Capital Square, the downtown high rise block, for S$889 million ($700 million) on behalf of client, Ergo Insurance Group.
Ergo, part of German giant reinsurer, Munch Re, bought the 16-storey building in 2002 since when it has been managed by MEAG Pacific Star Asset Management, a joint venture between Pacific Star and MEAG, which is the asset manager of both Ergo and Munich Re.
In a statement, Pacific said the buyer was fellow Singapore-based real estate investment firm Alpha Partners, with the price equating to around $2,300 per square foot.
Since acquiring the office property in downtown Church Street, the managing joint venture has improved the building by adding value via lease restructuring and improvements to the building’s energy efficiency. It then managed to refinance the asset by issuing the largest Singapore-dollar denominated corporate bond in 2009.
Wolfgang Wente, head of real estate funds at MEAG said the sale had been made despite the “volatile” and “challenging” investment climate.